A Senate committee on Monday approved legislation that would put half a billion dollars toward affordable housing in New Mexico – a huge investment that one lawmaker said is necessary to stem the tide of homelessness and rising housing costs in the state.

Sen. Nancy Rodriguez (D-Santa Fe) acknowledged that the Legislature likely won’t award the full amount of her proposed $500 million appropriation request for the Housing Trust Fund, a program overseen by the New Mexico Mortgage Finance Authority. 

She asked for that amount of money to send the message that there is an overwhelming need for a huge investment in housing across the state. And she said Housing Trust Fund administrators have proven themselves capable of leveraging relatively small appropriations from the state into more affordable housing options. 

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“This is an agency that is proven, truly. They do great work. It’s statewide,” Rodriguez said. “You can just see the results. As soon as they get the funding, it goes out.”

The Senate Committee on Health and Public Affairs approved the legislation on a 6-3 vote, with all Republicans voting against. It now moves on to the Senate Finance Committee, where it will face more scrutiny. 

The Housing Trust Fund was set up in 2005 to spur investments in affordable housing and to help people find a place to live. It provides grants for mortgage assistance, home weatherization and loans for affordable housing development, among other programs. 

In all that time, the agency has received $61 million from the state, including $25 million of federal funds awarded to address the coronavirus pandemic. In July 2023, the fund also received $37.5 million in severance tax bond proceeds, of which more than half has been allocated, according to the agency. 

With that funding, the agency has assisted 6,500 households by filling gaps in funding to keep people housed, helping make multi-million-dollar affordable housing complexes break ground, and getting homeless people off the streets. 

Isidoro “Izzy” Hernandez, the Mortgage Finance Authority director, said the fund’s return on investment – based on the interest it receives on loans to developers, federal low-income tax credits and other sources – is 16-to-1.  

The agency anticipates being able to spend $50 to $80 million from the fund per year, so estimates show the $500 million appropriation request would last for between six and 10 years, according to the Mortgage Finance Authority. Any money not spent in the first year would stay in the fund, according to the legislation. 

As many as 20,000 New Mexicans experience homelessness over the course of the year

As part of her priorities this session, Gov. Michelle Lujan Grisham is calling for a $250 million appropriation for the Housing Trust Fund to assist renters, homeowners and those without shelter, as well as a loan program to finance building or renovation. She’s seeking another $250 million to the New Mexico Finance Authority for similar programs. 

But the nonpartisan Legislative Finance Committee is seeking only a $50 million appropriation, according to its recommendations. The committee report does not explain why it arrived at that figure. 

Nearly 4,000 New Mexicans were homeless during a 2023 point-in-time count, an increase of 48% since 2022 and likely a huge undercount.

The state lacks 32,000 units affordable to those with low incomes, and nearly 220,000 households in the state spend more than 30% of their income on housing costs, according to the Mortgage Finance Authority. 

In addition to sending along the proposed $500 million appropriation, the committee supported $500,000 for the state finance department, which Rodriguez said would go to help small towns complete housing plans that would qualify them for additional help from the Housing Trust Fund.